Advocates Take Aim at Medicare Policies on Observation Care
Patient advocates are challenging a Medicare rule that denies coverage for certain services for beneficiaries who are placed in observation care, USA Today/Kaiser Health News reports.
Medicare reimburses for nursing home care only if a beneficiary spends at least three consecutive inpatient days at a hospital. Beneficiaries who are placed under observation -- which is considered outpatient care -- cannot qualify for nursing home coverage, even if they are in the hospital for three days.
The number of beneficiaries under observation has increased by 69% in the past five years, reaching 1.6 million in 2011, according to the most recent federal statistics. In addition, the number of such visits that last more than 24 hours has doubled to more than 744,000 (Jaffe, USA Today/Kaiser Health News, 5/3).
Beneficiaries who are under observation face higher out-of-pocket costs, including higher copayments and charges for drugs that are not covered for outpatient stays.
CMS Proposes New Rule; Advocates Criticize It
Medicare officials last week proposed a new rule aimed at helping more Medicare beneficiaries become eligible for nursing home care after a hospital stay, the Washington Post/Kaiser Health News reports.
Under the proposed rule, patients would have to be admitted if a physician expects the individual to be in the hospital for three or more days. The measure is part of a larger hospital payment update released last week.
However, patient advocates and health care providers criticized the proposal, according to the Post/KHN. Toby Edelman, senior policy lawyer with the Center for Medicare Advocacy, said, "I can't imagine anyone is going to like this proposed rule because it makes time the determining factor in whether the services are provided on an inpatient or observation basis" instead of "what the hospital is actually doing for you, what kinds of care you need."
Edelman also said the rule is inadequate because it does not:
- Repeal or change the three-inpatient-days requirement for nursing home coverage;
- Require hospitals to notify patients of their observation status; or
- Give patients the right to appeal their observation status (Jaffe, Washington Post/Kaiser Health News, 5/3).
Lawsuit Seeks To Remove Observation Care Designation
CMA is representing 14 Medicare beneficiaries in a lawsuit against CMS to remove the observation care designation. The first hearing on the lawsuit is scheduled for Friday.
In the event that the judge rules against CMA and the beneficiaries, the plaintiffs plan to ask that hospitals be required to notify patients when they are under observation and beneficiaries be given the opportunity to appeal the decision before leaving the facility (USA Today/Kaiser Health News, 5/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.